Rezworth Burchenson (at podium), CEO of VM Investments Limited (VMIL), addresses shareholders during the 7th VMIL Annual General Meeting. Looking on is Michael McMorris (left), Chairman of VMIL, and Courtney Campbell (centre), President and CEO of the VM Group. The AGM was held at the VM Group corporate office in Half-Way Tree on Thursday, July 11, 2024.
VM Investments Limited (VMIL) is on a strategic path to accelerate its asset management franchise as the company seeks to overcome the pressures in the current economic landscape.
While discussing the entity’s overall 2023 performance at the 7th VMIL Annual General meeting held on July 11, Chief Executive Officer, Rez Burchenson, shared that while the period was marked by high interest rates and high inflation, prudent investment portfolio management remained the major anchor of the business model.
“Five of our Unit Trust Portfolios outperformed their benchmarks in 2023. Most noteworthy was our VM Wealth Classic Property Portfolio with investments gains of over $1B reflecting property appreciation, validating our real estate investment thesis. Our Global Equity Portfolio also emerged best in its class for 2023, averaging returns of upwards of 21 percent for unit holders”, Burchenson reported.
In addition to those unit trust gains, Burchenson reiterated the significant milestone recorded with the now complete acquisition of Republic Funds (Barbados) and subsequent launch of VM Wealth Funds Barbados, cementing VMIL’s push for overseas expansion, increased market presence and broadened its asset base.
The company was also active in the capital markets in 2023, with two noteworthy achievements. VMIL raised $11 billion as the lead broker for the VM Financial Group Preference Share listing. This was in addition to the $2.7 billion leveraged buy-out (“LBO”) transaction for the acquisition of Island Car Rentals.
Reporting on the entity’s financial performance, Deputy CEO of VMIL, Brian Frazer reiterated that while profitability was challenged because of an unstable investment climate, leading to a decrease in shareholder profits, there were still some encouraging indicators.
“Our asset management revenues increased by 19 percent in 2023, when compared to 2022, recording approximately $480 million. This is commendable and speaks to the resilience of the asset management business line even in challenging times. Our equity trading commission income also increased by 19 percent, moving to $84 million. Overall net fees and commission accounted for a whopping 50 percent of total revenues, up from 43 percent the previous year. We expect this trend to continue based on the strategic business objectives. Our bond trading income also continued to show resilience recording a 9 percent increase over 2022, moving to to $676 million. Overall gains on investments accounted for 46 percent of total revenues in 2023, in comparison to 41 percent the previous year”, Fraser indicated.
VMIL’s total assets increased by 1.95%, from $28.91 billion in 2022 to $29.50 billion in 2023; capital to total assets increased to 13.73%, compared to 8.6% in 2022; and the net book value per share increased from $1.66 to $2.70. The return on strategic investment deals is also bearing fruit, paving the way for additional private equity investments in 2024 and beyond. In his presentation, Frazer cited examples of increased performance from the entity’s equity stakes in Kingston Properties, Carilend and Home Choice Enterprises.
Frazer also noted that the entity’s capital base is now stronger, with VMWM having been allocated $1.5 billion from the total raised from the VM Financial Group Preference Share offer. This has been earmarked to pursue initiatives to enhance the revenue generating capacity, improve capitalization towards strengthening the VMIL’s financial resilience.
Operationally, VMIL recorded significant gains in 2023, evidenced by an improvement in their Jamaica Stock Exchange (JSE) Corporate Governance score which moved to 85.3 percent and an upgrade in the creditworthiness rating from the Caribbean Information and Credit Rating Services Limited (CariCRIS), earning a rating of BBB.
Allison Mais, Vice President of Operations at VM Wealth Management, reported that “there was, and continues to be, strong focus on building the governance framework of VMIL and VMWM, improving process automation and implementing client focused changes aligned to our digital transformation push.”
The VMIL playbook going forward includes plans to accelerate asset management, with a focus on regional expansion and real estate development and enhance operational efficiency via a digital self-service ecosystem towards creating a first-rate customer experience for our clients.
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Published by Loop Online News on July 12, 2024
